Question

Income Statements Segmented by Products Clay Consulting firm provides three types of client services in three health-care-related industries. The income statement for July is as follows: Clay Consulting Firm Income Statement For Month of July Sales $900,000 Less variable costs (604,000) Contribution margin 296,000 Less fixed expenses Service $70,000 Selling and administrative 65,000 (135,000) Net income $161,000 The sales, contribution margin ratios, and direct fixed expenses for the three types of services are as follows: Hospitals Physicians Nursing Care Sales $340,000 $260,000 $300,000 Contribution margin ratio 30% 40% 3096 Direct fixed expenses of services $22,000 $17,000 $11,000 Allocated common fixed service expenses $1,000 $1,000 $1,500 Prepare income statements segmented by client categories. Include a column for the entire firm in the statement Do not use negative signs with your answers. Clay Consulting Firm Product and Company Income Statements For the Month of July Hospitals Physicians Nursing Care Company Totals Type here to search

Answer 1

A B C Е Clay Consulting Firm Product and Company Income Statements For the Month of July 1 2 Hospitals Physicians Nursing Care Company Totals 300,000 $ 210,000 $ 90,000 $ 11,000 $ 79,000 $ 1,500 $ 77,500 $ 4 $340,000 $ 260,000 $ $238,000 $156,000 $ $102,000 104,000 $ $ 22,000 $17,000 $ $ 80,000 $ 87,000 $ $ 1,000 $ $ 79,000 $ 86,000 $ 5 Sales 900,000 604,000 6 Variable costs 7 Contribution margin 296,000 8 Direct fixed expenses 50,000 9 Product margin 10 Allocated common costs 246,000 1,000 $ 3,500 11 Product income 242,500 12 Unallocated common expenses: Selling and administrative Service (less allocated expenses and allocated common costs) 13 65,000 16,500 14 Total 15 81,500 $ 16 Net income 161,000 LO

C D Clay Consulting Firm Product and Company Income Statements 1 2 For the Month of July 3 Physicians Company Totals +B5+C5+D5 Hospitals 4 Nursing Care 5 Sales 340000 260000 300000 -+B5* (100%-30%)C5* ( 100%-40%)D5*(100%-30%)+B6+C6+D6 6 Variable costs 7 Contribution margin 8 Direct fixed expenses +B5*30% =+C5*40% +D5*30% =+E5-E6 22000 17000 11000 +B8+C8+D8 9 Product margin +C7-C8 +D7-D8 +B7-B8 +E7-E8 10 Allocated common costs 1000 1000 1500 +B10+C10+D10 11 Product income +C9-C10 +B9-B10 +D9-D10 +E9-E10 12 Unallocated common expenses: Selling and administrative Service (less allocated expenses and allocated common costs) 65000 13 70000-E8-E10 +E13+E14 14 15 Total +E11 - E15 16 Net income